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Walt Disney Profit Falls

DisneyThe giant Walt Disney Co.’s quarterly revenue fall 46 percent of this year particularly at its movie-studio and theme-park sector. Robert Iger, the chief executive and President called the quarter “difficult … due to the weak economy and other factors”.

Disney made total revenue of $613 million in first 3 months of 2009, low from $1.13 billion one year ago. The movies of Walt Disney have demonstrated to be a box office disappointment in this year and the income at  theme parks, which provide approximately a quarter of the company’s earning, fell 50 percent and profits turned down 12 percent.

So, to recover their loss, Disney has been providing reduction offers to increase audience and has cut almost nineteen-hundred jobs in the unit.

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U.S. Economy on Double-dip Recession

u.s. economyAnalysts and experts expect that the U.S. economy will return to growth later this year. However, they are afraid of because a danger of a second recession maybe occurred if monetary slackening and a weak dollar leads to increased inflation expectations. Immense stimulus spending and moves by the Federal Reserve to fuel economic activity is likely to jump-start the pale U.S. economy in the fourth quarter 2009 after it contracted 6.3% in last quarter of 2008.

A private research group, the Conference Board said the Fed’s moves to make the U.S. economy better by slashing interest rates and buying up billions in administration debt. It could have undesired consequences. Vice president and chief economist of The Conference Board, Bart Van Ark said “If the United States experiences a too-rapid recovery, there may be a risk of another recession in 2010.” Ark added “It may fuel expectations for a return to inflation, adding to the uncertainty concerning the pattern and path of economic recovery.”

He noted the U.S. economy has now the potential for a “double-dip” recession, like 1980 and 1982. As commodity prices are rise on the back of a falling dollar and monetary easing. However, on his point of view the likelihood of the scenario taking place is tiny as deflation risks are great. The country economy possibly will contract by 2.6% in this year. The figure is the largest annual decline since 1946. Administration stimulus spending must stem further economic decline.

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